Auto labelling policy configuration for over 100K sites. Excluding over 10k in the same policy

Hello aicvisions,

That's right. You can include or exclude a maximum of 100 sites per policy for SharePoint. Refer to:  Automatically apply a sensitivity label to Microsoft 365 data | Microsoft Learn

So, the suggestion is, instead of excluding sites, if the number of sites required by the policy is smaller, create policies that include those specific sites. This way, all other sites will be excluded by default.

Conversely, if the number of sites to be excluded is smaller, create policies that exclude those specific sites.

However, if you need to manage more than 100 sites, whether for inclusion or exclusion, creating multiple policies looks to be the viable option.

Please mark as solution, if you find the answer helpful. This will assist others in the community who encounter a similar issue, enabling them to quickly find the solution and benefit from the guidance provided.